Thousands of children who are missing from the care system and unofficially looked after by distant relatives or family friends could be at risk, the head of Ofsted warned today.

Many local authorities are failing to check the suitability of private fostering arrangements, said Christine Gilbert, chief inspector for children's services at Ofsted, despite being ordered to do so after the death of Victoria Climbié in Haringey, north London.

Victoria, eight, was murdered two years after moving from the Ivory Coast to live with her great aunt. She was abused by the woman and her boyfriend until her death in 2000. The case sparked the biggest shake-up of child protection services in history.

Gilbert told the British Association for Adoption and Fostering conference in London today that too many authorities were not identifying children lost to the children's services system after Victoria's death.

She said: "While I recognise the progress that some authorities have made, it cannot be right that after all the emphasis on the vulnerability of privately fostered children, from the Utting report in the 1990s, the Victoria Climbié inquiry and Lord Laming's report, to Every Child Matters and the Children Act 2004, there are still a quarter of authorities that have made very little progress.

"This is a disappointing position and the number of inadequate authorities continues to be far too high. Those of us here today know that this group of children have not received the protection they deserve and their needs have been neglected for too long."

She presented research by Ofsted inspectors which examined how well the new rules were being implemented in 82 authorities. It identified good practice in many areas: in the best authorities, social workers worked closely with community and religious groups to identify privately fostered children. But there were still serious concerns about the lack of information.

Ofsted estimates that there are around 1,300 children in private fostering arrangements but admits that in reality it could be many times more because there is no way of tracking the children. "No one knows for sure how many children may be privately fostered in this country," the research concludes. There is particular concern for the welfare of children who move to the UK to live with relatives, as was the case with Victoria.

Under the Children Act 2004, local authorities are obliged to encourage children who are living with an adult who isn't a parent or close member of the family to be registered with the local children's services to ensure they are properly cared for. The research found that when social workers learned of children in private fostering arrangements many did not complete a proper assessment of that child's safety.